Brait SE, owner of South Africa’s largest private-equity company, surged to a 13-year high after saying its fiscal first-half net asset value jumped 12 percent and on plans to expand its retail unit in Africa.
The stock climbed 6.2 percent to 36.22 rand by the close in Johannesburg, the highest since May 1999 and taking gains this year to 83 percent. About 1.3 million shares changed hands, 2.6 times more than the daily average over the past three months.
Brait’s book value was lifted by a 15 percent increase in retail-holding company Pepkor Ltd., which makes up 57 percent of the company’s assets, Chief Executive Officer John Gnodde said by phone from Cape Town today. The company, which has 280 Pepkor stores in Africa outside its home market, plans to increase the number 15 percent annually over the next three years, he said.
The market may be re-rating the stock in line with the broader retail sector due to the dominance of retailers in its investment portfolio, Simon Fillmore, an analyst at Independent Securities (Pty) Ltd., said by phone.
Brait’s other holdings include stakes in U.K. retailer Iceland Foods Ltd. and food group Premier Foods Ltd.
“It’s a share we hold and it’s run particularly strongly this year with all the other retailers,” Fillmore said.
Brait trades at 10.8 times March 2013 earnings, compared with 23 times earnings for Mr Price Group Ltd., the country’s second-largest clothing and homewear retailer. The FTSE/JSE General Retailers Index trades on 16.7 times December 2012 earnings.
The stock’s 30-day historical volatility, a measure of stock swings, increased to 31.39 from 26.91 the previous trading day. The FTSE/JSE Africa All Share Index’s 30-day volatility measure was at 11.27 versus 11.22 yesterday. A higher reading means the price of an asset can move dramatically in a short period.